July 30, 2014

Jim Rogers and Global Inflation

New Wave Slave videoJim Rogers, in his latest interview, cuts right to the chase: “I don’t own many equities, because I don’t know what is going to happen in the world economy. I expect more currency turmoil, more social unrest, more governments collapsing. So I am investing in currencies and commodities rather than stocks.” Pretty much like everyone else, as we have been suggesting for quite a while. Rogers snaps at the trademark CNBC question of what he would be investing in: “I have been explaining to everybody on CNBC for a year and half or two now that food prices are going to go through the roof, they’re going to explode. We have serious shortage of everything developing, including shortages of farmers… The average age of farmers in one major agricultural state is 58 years old. In 10 years it will be 68 years old. In parts of Japan they have no farmers… It takes 7 years for a coffee tree to mature. Orange trees, palm trees: you don’t just suddenly snap your fingers and suddenly get some more palm oil. All of this takes time.” So all those who believe that the surge in people rushing to fill the ag arbitrage holes will produce immediate results, may need to wait 3-7 years, dependant on access to manure.

On whether this is not a demand-led inflation in commodity prices:

Whenever governments have printed money throughout history, people put their money in real assets, whether it’s rice or silver or natural gas. People protect themselves, they don’t just say “give me some more paper money.” And if you say it’s not demand: go to India, go to China, see how people are changing their lives and using more.” As for supply: “Commodities are based on supply and demand. You can have demand go down, but if supply goes down more you are going to have a bull market.”

Not surprisingly, Rogers see oil at $150, and the exchange between Rogers and some CNBC guy discussing the role of speculators (it is all the evil speculators’ fault, never the Chairsaint) is worth watching the clip alone.

Rogers’ response to CNBC’s desperate attempt to get him to list a stock or two for the lemmings to buy into, the response is priceless: “Commodities have outperformed stock by 10 times over the last 10-12 years. Why aren’t you doing only commodities. It’s outperformed stocks by 1,000%. To me it’s pretty simple, you should change the name to CommoditiesNBC.”

And, finally, his response to what his stock exposure is is not what CNBC wanted to hear. “I am short emerging markets ETFs, short Nasdaq ETFs.”

Brilliant as always. (from the fine folks at ZeroHedge)

Here’s the Jim Rogers video posted by NewWaveSlave.com

Jim Rickards: Egypt, China, and Roger Daltry

New Wave Slave videoJim Rickards is one of my favorites and seems to be gaining much more attention, (as he should be) these days. Listen and learn..

(from YouTube) Jim Rickards along with Ed Yardeni and George Magnus discuss the impact of the uprising in Egypt and the possible impact in China as well. Jim Rickards is in his usual top form, but in my opinion, the others didn’t seem to add too much value to the conversation. Rickards said more in a few minutes than everyone else combined. I am guessing that Rickards is a believer in the saying, “brevity is the soul of wit”. He had a great line by calling Egypt’s Mubarak, “the Dick Fuld of the Middle East” and then he mentioned Roger Daltry (The Who) which makes complete sense in context of this interview.

Rickards also mentions how food inflation has caused riots down through history which has sometimes led to pro-democracy movements. He is a wealth of information and has a perspective that I have not found anywhere else. (Can you tell I am a fan?)

Take a look and pay special attention to Jim Rickards. He enters the fray at the 6 minute mark.